Asbestos estimation trial still under advisement in Pa. federal court

By Jon Campisi | May 2, 2013

PITTSBURGH (Legal Newsline) - It's been nearly three months since federal Judge Judith Fitzgerald ordered the submittal of post-trial briefs in an asbestos bankruptcy case originating out of Delaware, and thus far, it appears the case is in a state of limbo.

Fitzgerald, a U.S. bankruptcy judge who splits her time between the District Court in Delaware and the Western District of Pennsylvania, convened a weeklong proceeding known as an estimation trial during the second week in January, the goal of which was to try and close the discrepancy between what the debtors in the case figure they will owe to future asbestos claimants and what those representing the claimants and future claimants contend the now-insolvent companies will likely owe in damages.

The debtors in the case are Specialty Products Holding Corp., Bondex International and RPM International.

The debtors had previously been asbestos defendants in the tort system until they filed for Chapter 11 bankruptcy, a maneuver that puts a halt on civil litigation and requires the formerly solvent companies to set up a trust fund to compensate victims.

In this case, lawyers representing the debtors and attorneys representing the Official Committee of Asbestos Personal Injury Claimants put on their case before Fitzgerald in her sky-high courtroom on the 52nd floor of a Pittsburgh commercial tower from Jan. 7 to 11.

Since then, however, the case has remained fairly stagnant as the parties await Fitzgerald's ruling, which the jurist signaled would come before her planned May 31 retirement.

Fitzgerald is tasked with trying to get the disputed dollar amounts closer to an agreed upon figure; the debtors currently estimate their future asbestos liabilities to be somewhere in the range of $116 million, while the lawyers representing the claimants and future claimants put the figure closer to between $1.1 and $1.3 billion.

A look at the court docket shows little activity in the case, other than a handful of omnibus motions and other minor filings during the past few months.

This was confirmed by Natalie Ramsey, an attorney with Philadelphia-based Montgomery McCracken, which is representing the Official Committee of Asbestos Personal Injury Claimants.

"There has been virtually no activity and nothing of substance since the estimation trial," Ramsey wrote in an emailed message. "The case is kind of 'on hold' pending the Judge's ruling, which we expect sometime late May."

In a follow-up phone interview this week, Ramsey explained that the case cannot move forward until Fitzgerald issues her ruling.

The parties have agreed to hold off on filing any new motions and taking any further steps in the litigation until Fitzgerald's ruling comes through, she said.

"Until that ruling comes down it's difficult for the case to take a better direction," Ramsey said.

Fitzgerald did hold one hearing in April, according to Ramsey, during which the judge said it was her intention that when she reassigned the case to another judge upon her retirement, she would do so with the suggestion that the parties go back into mediation.

Ramsey, however, said she doesn't know at this point whether or not mediation would occur, or if the parties would change their respective positions on the estimated damages.

As for Fitzgerald, the judge is charged with making a determination on what she believes to be the present and future asbestos liabilities of the debtors.

Attorneys representing the claimants take the position that Fitzgerald should calculate this based upon what the debtors' liabilities would have been had they stayed in the tort system, while the lawyers for the bankrupt companies disagree that this should be the legal standard behind the judge's determination.

As for now, at least according to Ramsey, the parties are still in stark disagreement over the estimated future asbestos liabilities.

"We were way apart on our assessments," Ramsey said on how things were when the case started out.

And that hasn't seemed to have changed one bit.

Fitzgerald's ruling could come down any day.

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